Wednesday, August 14, 2002

Why Predictability is Bad and Surprises are Good

Too many mangers think that the key problem with product development is the surprises. They try to eliminate all variability from the process. By now you should understand that it is the uncertainty that creates the information and the information that crates the value of product development. This means that it is foolish to try to drive out variability from the development process.

“We would propose an alternative solution. We need to create processes that continue to function in a world with variation. Fortunately, there are abundant tools to do this. The primary obstacle to using them is the belief that product development is or should be deterministic. It is time to discard this notion and use the right tools. It is time to recognize that the emperor has no clothes on, and that he never will. We need to treat development as a process with inherent variability [and] approach development process design with the objective of making the process tolerant of variability as a key design objective.”

These are the words of words of product development expert Donald G. Reinertsen in his excellent book, Managing the Design Factory, Free Press, 1997. A co-author Developing Products in Half the Time, John Wiley and Sons, 1991, Second Edition 1997, Reinertsen developed simple economic models for trading off development cost, unit cost, product performance and development delay. In Managing the Design Factory, he sets out to show how to apply the principles of Lean Manufacturing to Product Development, and how not to apply them.

Try-it-fix-it gives better quality faster
“There are two schools of thought as to how we might get to [a] good design. One school holds that we should strive as developers to reduce the error rates. If we keep analyzing the design to minimize the number of errors, we will get a better design on the first try.... The other school of thought says: do it, try it, fix it. This school lacks the moral high ground of the other approach, but is well-grounded in the practical observation of what works for successful companies in the real world.” says Reinertsen in Managing the Design Factory. He goes on to show that a reduced cycle time for iterations produces lower defects in less time. “On the surface, this seems too good to be true. The try-it-fix-it approach is faster and higher quality.” Reinertsen says. However, as long as iterations do not contain significant fixed costs, the try-it-fix-it approach dose in fact produce better quality faster.

The reason for this is that design processes must create information if they are to add value. Creating information involves finding failures, especially unexpected (or low probability) failures. “The fallacy in thinking that high first-pass success optimizes the design process lies in underestimating the importance of information generation that occurs with failure.”

Do It Right The Second Time
Reinertsen notes that once we learn from a failure, it is a waste to learn the same lesson again. So we need to learn how to create failure and how to avoid the same failure a second time.

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